Correlation Between Amgen and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Amgen and Perseus Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amgen and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Perseus Mining Limited, you can compare the effects of market volatilities on Amgen and Perseus Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amgen with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Perseus Mining.
Diversification Opportunities for Amgen and Perseus Mining
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Amgen and Perseus is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Amgen is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amgen Inc are associated (or correlated) with Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Amgen i.e., Amgen and Perseus Mining go up and down completely randomly.
Pair Corralation between Amgen and Perseus Mining
Given the investment horizon of 90 days Amgen is expected to generate 4.2 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, Amgen Inc is 1.88 times less risky than Perseus Mining. It trades about 0.03 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Perseus Mining Limited on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Perseus Mining Limited or generate 42.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Amgen Inc vs. Perseus Mining Limited
Performance |
| Timeline |
| Amgen Inc |
| Perseus Mining |
Amgen and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Perseus Mining
The main advantage of trading using opposite Amgen and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen position performs unexpectedly, Perseus Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Amgen vs. Pfizer Inc | Amgen vs. Johnson Johnson | Amgen vs. Highway Holdings Limited | Amgen vs. QCR Holdings |
| Perseus Mining vs. Harmony Gold Mining | Perseus Mining vs. SPACE | Perseus Mining vs. T Rowe Price | Perseus Mining vs. Ampleforth |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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